Children in Mulan, a community of 150 in the Kimberley area, must also shower and turn up daily to school, and residents must keep their homes and gardens free of rubbish.

In return, they will receive state aid worth £62,500 towards the cost of new petrol pumps at a local shop. A further condition is that the community must ensure that petrol from the pumps is not used for sniffing.

The scheme, dubbed “wash for fuel”, has caused an outcry among Aboriginal groups and opposition politicians, who said that it was “patronising and insulting.” But John Howard, the Prime Minister, said it was “common sense” to put the Aborigines on behavioural contracts in return for health and social services, education and unemployment allowances.

Mark Sewell, an Aboriginal representative in Mulan, also defended the terms of the state aid. “We don’t feel the Government is standing over us telling us we have to do these things or we’ll lose privileges,” he said. But with relations between black and white Australia at a low ebb, critics say that the scheme could incite unrest.

Geoff Clark, chairman of the Aboriginal and Torres Strait Islander Commission, said: “The fact that the Aboriginal community can only receive these additional essential services like petrol and economic opportunity with a gun at their head is completely over the top.”

Senator Kim Carr, the Labor Aboriginal Affairs spokesman, said: “The Government is telling indigenous Australians that to obtain basic services they must meet conditions not imposed on others.”

The Government insists that the draft agreement is part of a broader push for indigenous communities and the Government to work together to improve health, especially among children.

Aborigines have one of the highest infant mortality rates in the Western world and have a high rate of eye and ear infections which often lead to deafness and blindness in later life.

Carol Martin, a local MP, accused the Government of ignoring the fact that some Aboriginal communities did not even have the water to wash their faces. She said: “If you’re going to have a mutual obligation, it actually means a little bit more than bloody dumping everything on Aboriginal people.”

Amanda Vanstone, Indigenous Affairs Minister, described the scheme as “an excellent example of the community, the West Australian Government and the Australian Government working together to provide a better deal for an indigenous community”.

The political row took an unexpected turn yesterday when Mr Sewell revealed that the arrangement was similar to a plan the tiny community had originally proposed to the Government as part of a renewed effort to improve children’s health.

The treatment of Australia’s indigenous people is a sensitive issue. Yesterday more than 1,000 protested in Townsville, Queensland, over the death in police custody of an Aboriginal, Cameron Doomadgee, on Palm Island, off the east coast.

They claimed that his death last month — which prompted a riot on the island and arson attacks on the police station and government buildings — was the result of heavy-handed police treatment.